The governor of the Banque de France opposes the revision of the HCSF criteria on real estate credit


Written by The Meilleurtaux editorial team . Updated March 26, 2024 .
Reading time : 3 mins

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In order to contain the over-indebtedness of the French, the High Financial Stability Council (HCSF) has introduced various constraints concerning the granting of housing loans. But faced with the drop in production, which contributed to the crisis in the real estate market, households and various stakeholders are calling for a relaxation of the rules. A request which the governor of the Bank of France vetoes.

The restrictions put in place by the HCSF on real estate credit

The HCSF is responsible for the financial stability of France. It is notably at the origin of the restrictions imposed on banks concerning real estate credit:

  • the debt rate or effort rate must not exceed 35%, which means that the amount of the monthly repayments of the loan can only represent a maximum of 35% of the income of the applicant household;
  • the loan must be paid in 25 years, unless it is used to finance a property requiring work representing 10% of the total cost of the operation.

Important Banking establishments, however, have the right to deviate from these standards for 20% of their files, under two conditions:

  • the exceptions primarily concern the acquisition of a main residence;
  • around 33% of financing must concern first-time buyers.

What rate for your project?

The governor maintains his position on the rules of real estate credit

The governor recalled that the implementation of the famous HCSF criteria aimed to limit over-indebtedness.

These milestones are intended to reassure lenders and authorities as to the ability of property owners to honor their commitments. Mr. Villeroy de Galhau also emphasizes having already loosened the screw by raising the debt ceiling from 33% to 35%.

Finally, he draws attention to the fact that the 20% room for maneuver available to banks is only used to 15%.

He thus rejects the criticisms made against the HCSF and its rules. It actually contradicts the position of the Minister of the Economy, who spoke in favor of the bill carried by fifteen and submitted by Lionel Causse, elected Renaissance des Landes. This text has three key points:

  • modify the composition of the HCSF,
  • replace the rate of effort with the notion of “remainder to live”,
  • increase the flexibility of lending institutions regarding the 35% debt limit.

However, the date of the first quarterly meeting of HCSF members for 2024 is not yet known. Last year, it was held on March 7.

To remember
  • The HCSF has put in place restrictions on real estate credit to control the overindebtedness of the French.
  • These restrictions include a maximum effort rate of 35% and a loan duration limited to 25 years.
  • The governor of the Bank of France rejects criticism of these standards and refuses to relax them.
  • The next HCSF meeting, scheduled for 2024, will be decisive for the future of these measures.

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